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Microsoft Unveils New Cloud-Friendly Version Of Office

At an event in San Francisco today, Microsoft CEO Steve Ballmer previewed a new version of Office, the company’s widely used productivity software suite. This is no ordinary upgrade: with “Office 15,” as the software is know internally, Microsoft is effectively changing the way it has positioned the product from stand-alone application software to be cloud-aware and Web-centric.

Most startling to many will be the focus on subscription-based consumer versions of the software, to be offered under the company’s Office 365 software-as-a-service brand. In effect, the company is beginning a move to gently push Office customers away from “perpetual licenses” – the kind you get when you buy a shrink-wrapped application at retail – and toward subscription-based licenses, where you effectively pay as you go and store information in the cloud. The moves today also will cash a new spotlight on SkyDrive, the company’s cloud-based storage service.

New logo!

While the cloud-based versions of Office still involve installation of desktop-client software, they include multiple changes in the way you interact with the software and your data. For one thing, the software will assume as a default that you want to store your data on the cloud in the company’s SkyDrive service, and not only on your PC. The idea is to make it easy to work on documents from any of your devices – and even devices that aren’t yours. Subscribers will get ongoing updates of the software, eliminating the need to manually download updates and patches.

Even the old-fashioned perpetual-license versions of the software will start with the assumption that your documents are going to be stored in the cloud.

Another key aspect of the overhaul: the new versions of Office have been rewritten to take advantage of the touch features built into Windows 8, the soon-to-be-launched new version of the company’s operating system software.

“We are taking bold steps at Microsoft,” Ballmer said in a statement. “The new, modern Office will deliver unparalleled productivity and flexibility for both consumers and business customers. It is a cloud service and will fully light-up when paired with Windows 8.”

The new Word start screen.

Customers who sign up for the subscription versions of Office will be able to install the software on up to five devices, and will be able to access some version of the software on any PC, Mac, or mobile device. The software will synch documents and settings, so you can easily stop work on one device and pick up again on another one. For working on a guest device, Microsoft will allow subscribers to log in to the service and download a version of the software on a temporary basis; subscribers also will be able to access versions of the applications via a Web browser.

The subscription services include 20 GB of storage on SkyDrive as well as 60 free minutes a month of Skype usage.

Other key aspects of the announcements this morning:

Using a feature Microsoft calls “inking,” you can use a stylus to create content, take notes and access features. You could, for instance, handwrite an email and have it converted to text.

Microsoft said that OneNote and Lync are “the first new Windows 8 style applications for Office.” OneNote, in particular has an unusual “radial menu” feature that makes it easy to access features with touch alone.

Windows RT will include Office Home and Student 2013 RT, with new versions of Word, Excel, PowerPoint and OneNote, and will be included on ARM-based Windows 8 devices, including the ARM-based version of Microsoft Surface tablets.

Office saves documents to SkyDrive by default. That’s a huge change in thinking: that the most obvious placnew to store a document is in the cloud, rather than on your hard-drive on your PC.

The company said the full lineup of offerings and pricing plans will be announced in the fall. But Microsoft did say that there will be three new Office 365 subscription services, all of which will include the new 2013 editions fo Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access. Subscribers all will get upgrades to all versions, in addition to the rights to install the software on up to five devices.

The three new versions:

Office 365 Home Premium: Includes an additional 20 GB of SkyDrive storage and 60 minutes of Skype world minutes per month.

Office 365 ProPlus: An enterprise version with “advanced business capabilities and the flexibility to deploy and manage in the cloud.”

As often is the case with Microsoft, the company is at risk of confusing the heck our of everyone with their approach to product naming, so let’s review:

Office 365 is their software-as-a-service brand. It includes versions of the software offered on a subscription basis.

Office suites are designed a year model. Ergo, Office Home and Student 2013. They are sold by perpetual license – which is to say, the way you’ve always bought software in the past.

Office 15 is an internal code-name; you won’t be buying something branded as Office 15.

P.J. Hough, corporate VP for development in the Microsoft Office Division, says buying Office as a subscription shifts the purchase from buying the software for a PC to buying it for yourself – no matter where you are or what device you happen to be using.

“Overall, this is a very exciting release of Office for us,” Kurt DelBene president of the Microsoft Office Division, said in an interview with FORBES. “It continues a transformation of the business that we have been on for a while.” He notes that Office has been performing well of late. The company recently said it now has more than 1 billion Office users around the world. The business had just shy of $6 billion in revenue in the March quarter, up about 9% from a year go. He notes that Microsoft has made a move to make Office more social with the acquisition of Yammer; he adds that the user base for Office 365 is growing strongly, though he declines to give any specific customer numbers.

“Office 15 is a very ambitious release for us that continues our transformation to the cloud,” adds new versions of Office 365, adds new device support and touch capability and including inking in products like OneNote, he says.

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